Gwanda mine raises US$8 million from Victoria Falls bourse

WITH only six months after officially listing on the Victoria Falls Stock Exchange (VFEX), Jersey domiciled gold producer, Caledonia Mining Corporation, which operates Blanket Mine in Gwanda, says the United States-dollar denominated bourse has ushered in a new era of growth for its operations in Zimbabwe.

Backed by a conducive investment climate and the 100 percent incremental forex incentive scheme, the New York Stock Exchange and AIM listed group has raised close to US$8 million from VFEX - launched in October 2020 as an off-shore financial services centre.

Caledonia group chief executive officer, Mr Steve Curtis, says the VFEX platform has attracted more investor interest to the company than they expected, with the funding raised from listing being channelled towards capital expenditure and the 12MW solar project, set for commissioning next month.

For the first time in history, listing on VFEX has also opened a window for Zimbabweans to have shareholding in the foreign-owned company, he added.

"Listing on the VFEX didn't only provide us with opportunity to receive 100 percent US-dollars in respect to incremental income but to also open up Caledonia stakeholder base to Zimbabwean investors and its employees, which we feel is very important to demonstrate our commitment to Zimbabwe and supporting its social development system," said Mr Curtis.

"The local appetite to invest in Caledonia has been far greater than expected, we had to issue more shares to equate to about US$3 million in order to meet the initial minimum float requirement."

In December 2021 when the company was officially admitted to VFEX, Mr Curtis said the group issued and invested nearly 620 000 new shares and "raised US$8 million" into the coffers of Caledonia.

"The funds generated were used to make investments into Blanket's capital expenditure and for offshore supplier payments for certain pieces of equipment, and to also fund part of the 12MW solar plant project, which is expected to come online in the next few weeks," he told delegates who attended the recent Chamber of Mines Conference in Victoria Falls.

"That's the US$14 million project and a fair proportion of the VFEX money is in there, that's going to be switched on next month."

Following the listing on the exchange, Mr Curtis said he was proud that locals, including pension funds were now holding stakes in Caledonia shareholding.

He said the new solar power project is expected to substantially ease the company's energy costs with excess output going to the national grid.

This comes at a time when Zimbabwe and the entire Southern Africa are experiencing acute power shortages, said Mr Curtis, adding that the shift to solar power buttresses global trends towards alternative energy solutions that are environmentally friendly.

With a 2021 production boost of 67,476 ounces above target, Caledonia also acquired mining claims over Maligreen last November, which contains inferred resource of 940koz at 1.88g/t in the Midlands province.

is expressed confidence in VFEX, which has so far attracted four counters - SeedCo International, Padenga and Bindura Nickel Corporation, amid growing interest.

He said the Government's bold decision in May last year to announce a range of incentives to encourage mining companies to increase production and to stimulate foreign investment, was commendable.

"One of the most important things that drew us to the VFEX was that you can receive 100 percent US-dollars retention on your incremental production if you were listed on the VFEX," he said.

"Getting 100 percent US-dollars is very important for us, firstly, and I think there have been a number of conversations about the (forex) retention and retention structure and we always talk to the (RBZ) Governor about this.

"Now that we are getting paid 100 percent US-dollars for gold, from Blanket Mine's perspective, that equates to about 20-25 000 ounces per year because blanket is increasing its production because of the investment we have put in.

"That means all of this production is in US-dollars and that's really important and it enables us to export our own gold. That was a very good incentive that Government put in front of us and we grabbed it with both hands and listed on the VFEX."

Before listing on the VFEX, Caledonia was already on a positive momentum having completed its US$70 million investment into the new Central Shaft project at Blanket, which has enabled the mine to increase its life span up to 2034, with the mine now at 1 200 metres deep.

Mr Curtis said a brand-new mine was also being built underneath the old mine, which has been practically mined out from the surface to 750 metres over the 115 years of the company's existence.

"So, Caledonia is going to produce 80 000 ounces through expanded operations and that puts us in a good stage. We have already seen that our investment is bearing fruit," he said.

"Our market capitalisation at the moment is just about US$190 million and apart from one indigenous partner that Blanket Mine had when we went into the indigenisation process, we really didn't have any footprint of Zimbabwean shareholders in the Caledonia group," said Mr Curtis.

"We didn't have local people operating at the top core level."

He said the situation has now changed with Blanket Mine currently having about 60 managers who include several locals.

Mr Curtis said Caledonia continues to pay its dividend on a quarterly basis and clarified that all of its shareholders were happy to be rewarded for their investments in US-dollars.

He also paid tribute to the RBZ for playing a crucial role through issuance of necessary exchange control approvals and official acceptance of Caledonia listing on the VFEX as a foreign company.